Transcript Identifying Marketing Segments and Targets

Identifying Market Segments
and Targets
KEY CONCEPTS
Segmentation-Targeting-Positioning (STP)
 Identify and profile distinct groups of buyers who
differ in their needs and preferences (market
segmentation).
 Select one or more segments to enter (market
targeting).
 Establish and communicate the offering’s distinctive
benefit(s) to each target segment (marketing
positioning).
Levels of Market Segmentation
 Segment marketing
 Niche marketing
 Local marketing
 Individual marketing
Segment Marketing
 Market segment—a group of customers who share a
similar set of needs and wants.
 Homogeneous preferences—exist when all
consumers have roughly the same preferences.
 Diffused preferences—consumers vary greatly in
their preferences.
Niche Marketing
 Niche—a more narrowly defined customer group
seeking a distinctive mix of benefits.
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Attractive when:
Customers have a distinct set of needs
 Fairly small but has size, profit, and growth potential
 Customers will pay a premium
 Nicher gains certain economies through specialization
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Local Marketing
 Marketing programs tailored to the needs and
wants of local customer groups in particular
trading areas, neighborhoods, even individual stores.
 Grassroots marketing—concentrating on getting as
close and personally relevant to individual customers
as possible.
Individual Marketing
 Leads to:
 “Segments of one”
 “Customized marketing”
 “One-to-one marketing”
 Customerization—combines operationally driven
mass customization with customized marketing in a
way that empowers consumers to design the product
and service offering of their choice.
Bases for Segmenting Consumer Markets
 Geographic
 Demographic
 Psychographic
 Behavioral
Geographic Segmentation
 Dividing the market into different geographical units
such as:
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Nations
States
Regions
Counties
Cities
Neighborhoods
Demographic Segmentation
 Divide the market into groups based on age and
other variables:
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Life-cycle stage
Life stage
Gender
Income
Generation
Social class
Psychographic Segmentation
 Psychographics—the science of using psychology
and demographics to better understand consumers.
 Buyers divided into groups on the basis of:
 Psychological/personality traits
 Lifestyle
 Values
Behavioral Segmentation
 Divide consumers into
groups on the basis of
their knowledge of,
attitude toward, use of,
or response to a product.
 Behavioral variables:
 Occasions
 Benefits
 User
status
 Buyer-readiness
stage
 Loyalty status
 Attitude
Bases for Segmenting Business
Markets
DEMOGRAPHIC
OPERATING VARIABLES
PURCHASING APPROACHES
SITUATIONAL FACTORS
PERSONAL CHARACTERISTICS
Effective Segmentation Criteria
 Measurable
 Substantial
 Accessible
 Differentiable
 Actionable
Evaluating and Selecting Market Segments
 Must look at two factors:
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Segment’s overall attractiveness
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Company’s objectives and resources
Patterns of Target Market Selections
 Single-segment concentration
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Focus on one segment
 Selective specialization
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Select a number of segments
 Product specialization
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Specialize in making a certain product for several segments.
 Market specialization
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Serve many needs of a particular customer group.
 Full market coverage
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Serve all customer groups with all the products they might
Full Market Coverage
 Undifferentiated marketing—firm goes after the
whole market with one market offering.
 Differentiated marketing—operate in several market
segments and design different programs for each
segment.